; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Staggered Contracts and Business Cycle Persistence"; ; "batchuser@example.com"; "Huang, Kevin X. D.", "Liu, Zheng"; "Federal Reserve Bank of Minneapolis"; "J30 - Wages, Compensation, and Labor Costs: General", "E37 - Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications", "E52 - Monetary Policy", "E32 - Business Fluctuations; Cycles"; "Staggered price and staggered wage contracts are commonly viewed as similar mechanisms in generating persistent real effects of monetary shocks. In this paper, we distinguish the two mechanisms in a general equilibrium framework. We show that, although the dynamic price setting and the dynamic wage setting equations are alike, a key parameter governing persistence is linked to the underlying preferences and technologies in different ways. Under the staggered wage mechanism, an intertemporal smoothing incentive in labor supply creates a real rigidity that is absent under the staggered price mechanism. Consequently, the two have different implications on persistence. While the staggered price mechanism by itself is incapable of, the staggered wage mechanism has a great potential in generating persistence. "^^; "1999-09-01"; "2019-05-21T16:23:37.511603586+00:00"^^; "https://doi.org/10.21034/dp.127"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "Wed Apr 22 16:38:53 2020"; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "461", "349"; "Discussion paper (Federal Reserve Bank of Minneapolis. Institute for Empirical Macroeconomics)"; "127"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Institute for Empirical Macroeconomics"; ; "Publication" . ; .